Octopus Energy has issued a message to customers to act before July when Ofgem's new price cap will take effect.

The has confirmed its for the three months from July 1, announcing a . The price cap sets the maximum rate per unit and standing charge that customers in England, Scotland and Wales can be billed for their . The cap is reviewed and changed every three months, with new rates taking effect in January, April, July and October.

The amount rates are set is largely determined by facing suppliers for providing energy and it is down to a recent fall in wholesale prices for the overall reduction in July.

Under the current price cap, the average bill for households on standard variable tariffs is £1,849 per year, but from July 1, this figure will drop to £1,720 per year, giving households an annual saving of £129 on average, or around £11 per month.

But the price cap only sets the maximum rate per unit and standing charge that customers can be charged by suppliers for their energy use, not the total bill - so if your energy use is above the average you'll pay more, and if it's below you'll pay less.

Not all households are subject to the price cap as it's only paid by those not currently on a fixed tariff, so if you switch it's possible to undercut the price cap significantly.

In a message to customers, Octopus Energy advised that locking into a fixed tariff ahead of the July price cap change would still be more beneficial and result in bigger savings long-term, even though the cap is coming down.

It said: "From July 1st - September 30th 2025, the energy price cap for a typical home using gas and electricity and paying by Direct Debit will be £1,720 per year. This is 7% less than the April price cap, and will knock about £11 off monthly bills.

"However, even though variable rates have dropped, we think it's still worth locking in your prices on a fixed tariff. These currently offer our cheapest rates, meaning you could save more in the long run.

"This could change in the future, so check out for a sense of how we think prices could fluctuate over the year. Just bear in mind there are no guarantees."

Octopus Energy says its fixed tariff "locks in the cost of your energy for a fixed term", which is usually a period of 12 months, which means you won't be affected by any changes in wholesale prices throughout the year.

As such, you'll know exactly how much you'll pay per unit of gas and electricity which helps with budgeting and it protects you from any significant shifts in the energy market during the course of your fix.

Of course, the risk is if wholesale energy prices fall even further then you won't benefit from any savings as the cost of your energy will stay the same.